March 24, 2016
Wealth Minerals Ltd. has arranged a non-brokered private placement of common shares to raise up to $1.6-million. The company has also negotiated debt settlements to settle $687,000 of debt through the issuance of common shares.
Non-brokered private placement
The company has arranged a non-brokered private placement of common shares consisting of up to eight million common shares at a price of 20 cents per share to raise gross proceeds of up to $1.6-million. All shares issued in the placement will have a hold period in Canada of four months from the closing of the placement.
The net proceeds from the placement are intended to be used to finance the costs related to the continuing discussions with Li3 Energy Inc. pursuant to the letter of intent with Li3 announced on Feb. 1, 2016, including to carry out and complete the required due diligence on Li3 and the Maricunga lithium project, for the review and assessment of additional potential lithium mineral property acquisitions and the negotiation of related formal documentation for any such acquisition(s), for property payments, and for general and administrative expenses and working capital.
The company has negotiated the settlement of an aggregate of $687,000 in debt related to certain accounts payable to Cardero Resource Corp. ($477,000) and a portion ($210,000) of the principal sum of certain outstanding loans originally made to the company in 2011 by a number of individuals, some of whom are non-arm’s length to the company. The debt will be settled by the issuance of an aggregate of two million common shares at a deemed price of 21 cents per share. The common shares issued in the debt settlement will have a hold period in Canada of four months from the date of issuance. The company is undertaking the debt settlement to preserve its working capital and the completion of the debt settlement will not create any new control persons.
Completions of the placement and the debt settlement are both subject to the acceptance for filing thereof by the TSX Venture Exchange.
The company is continuing discussions with Li3 under the LOI, and the parties have agreed to extend the due diligence period for an additional 60 days to 120 days total. However, no formal agreements have been entered into and the completion of any transaction with Li3 remains subject to a number of conditions precedent, including the completion of satisfactory due diligence by each company on the other and the Maricunga lithium project, the negotiation and settlement of final definitive terms for a transaction satisfactory to both parties and the execution of formal agreements in that regard, receipt of any required shareholder and court approvals, receipt of any required consent from Li3’s Chilean partner, the completion of the required financing and the acceptance for filing of any such transaction by the TSX Venture Exchange on behalf of Wealth. Accordingly, it is not possible to complete any transaction with Li3 until all conditions have been satisfied and that there can be no certainty that any such transaction will be completed, either as presently proposed, or at all.
In addition to the continuing discussions with Li3 under the LOI, the company is currently also involved in the review and evaluation of a number of prospective lithium mineral projects in South America for possible acquisition. However, no agreements with respect to the acquisition of any such mineral projects has yet been entered into, and there can be no assurance that the company will, in fact, be successful in entering into any such agreements or acquiring interests in any additional mineral properties.
We seek Safe Harbor.